Oregon lawmakers grant Nike's request on taxes

Signs in protest of emergency legislation requested by apparel giant Nike Inc., greet visitors arriving Friday at the Oregon state Capitol in Salem, Ore. Lawmakers convened in a special session and passed the bill. (Jonathan J. Cooper/AP)

By JONATHAN J. COOPER, Associated Press

Published: December 14, 2012, 9:26 PM

SALEM, Ore. -- A deal proposed by Nike Inc. to create hundreds of jobs in Oregon in exchange for a guarantee that the state won't change a favorable corporate tax structure prompted state lawmakers to approve emergency legislation Friday.

Critics have questioned the timing and purpose of the special session, but the state's part-time legislators met in Salem on four days' notice to give the world's largest athletic shoe and apparel company the assurances it demanded.

The deal is evidence of the lengths Oregon leaders will go to protect the state's best-known company.

Gov. John Kitzhaber's decision to call the special session stunned lawmakers who didn't see it coming, underscoring that even as tax incentives have become a common tool for politicians to lure large employers, Nike's deal is unconventional.

The meeting cost taxpayers $13,000 and came less than two months before the regular legislative session was set to convene. It is aimed at maintaining the status quo, rather than approving new tax breaks.

Such factors led Kitzhaber to acknowledge the emergency legislative session was "extraordinarily awkward."

Still, Nike plans to create 500 or more jobs and invest at least $150 million in an expansion if the "single sales factor" tax benefit remains in place, according to the Democratic governor.

It was unclear whether Nike would actually move to expand outside of Oregon -- a company spokeswoman refused to say -- but the mere threat was enough to prompt action.

The prospect of many new jobs is critical in a state that has no sales tax and limited property taxes, so relies heavily on personal income taxes, said Rep. Vicki Berger, R-Salem.

Nike employs thousands of people in Oregon, many of them at its headquarters in relatively high-wage jobs including legal, design, sales, information technology and corporate strategy.

Company officials have not said what form any expansion would take.

Kitzhaber has said Nike approached his staff about a month ago, saying it was being courted by other states but would expand in Oregon if officials promised to keep in place the substantial tax benefits for companies that employ many people in Oregon but sell most of their goods elsewhere. The bill extends the law for 30 years.